Hundreds of 'at risk' firms to get Scottish Enterprise help

MORE than 350 companies have been placed on an "at risk" register by Scotland's economic development agency as it steps up its efforts to help businesses survive the recession.

Scottish Enterprise (SE) is providing intensive help for the "at risk" firms in an attempt both to avoid company closures and to ensure that businesses with growth potential take advantage of an anticipated economic recovery.

Executives at SE have identified the companies – many of them in the recession-hit financial services and construction sectors – after a survey of the about 1,800 firms on SE's books.

Nearly half of the firms surveyed expect to grow this year. However, about 20 per cent are predicting a decline in their business, leading SE to offer special help.

Well-placed SE sources last night made it clear that the body, which published its business plan for 2009 to 2012 yesterday, would not be riding to the rescue of businesses that stood no chance of surviving the recession. One senior source said: "We're not interested in the desperate – we are interested in the dynamic."

The Scottish Government-funded development body works with firms ranging from start-ups with no revenue to those with turnovers of up to £50 million.

Yesterday's SE business plan revealed that nearly £190 million would be invested in direct support for Scottish businesses over the next three years.

A total of £17 million will be invested this year in "specialist support for companies", which SE says includes "help to develop leadership and management capabilities" at firms. There will also be specialist help for more traditional industries through SE's Scottish Manufacturing Advisory Service.

Almost £14 million will be spent on encouraging investment in research and development with £26 million to increase the availability of risk capital for Scottish companies. An additional £5 million will be invested to help businesses expand into new overseas markets.

SE chairman Crawford Gillies said the three-year plan sought to "strike a balance" between providing more short-term support for firms and helping companies with potential to become big players in Scotland in the future.

Gillies explained: "We are making the right investment to help companies now but also to make sure they are in a strong position when we come out of the downturn."

SE advisers, who are assigned to specific companies, are understood to be helping firms in key areas including the availability of finance; cutting costs and overheads; managing declining revenues; and managing their cash flow.

Jack Perry, chief executive of SE, added: "We have worked hard to ensure that we can respond to the needs of our companies quickly and effectively. Over the next year we will also be encouraging our business customers to think creatively about how they develop new products and processes, implement new ways of working and target new markets, as well as challenging existing business models."

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STEEP FALL IN FACTORY ORDERS

SCOTLAND'S manufacturers have suffered a sharp fall in orders and fear worse is to come, according to a survey published yesterday.

Domestic orders in the past three months have shrunk more quickly than at any time since 1999, research from the CBI showed.

A further fall is expected over the next three months, when business leaders fear domestic orders will be at their weakest since July 1980.

Exports have fallen at their fastest rate since January 1983, the CBI survey also revealed, tumbling faster than across the UK as a whole.

The figures were released in CBI Scotland's latest quarterly industrial trends survey.

They showed the quarterly declines came despite small falls in domestic and export prices.

Output fell over the latest quarter, reflecting the fall in orders, and firms also started to shed workers.

Jobs fell at their fastest pace since October 2002 and the pace is set to increase slightly over the next three months.

Investment intentions remained "poor", reflecting uncertainty about demand and concerns over finance. Capital expenditure plans were "particularly weak".